Peter Hebblethwaite, CEO of P&O Ferries, has admitted that the firm broke UK law when it failed to consult with unions. He made the argument that no union would have accepted the firm’s plans to cut jobs, adding, "We chose not to consult and we are, and will, compensate everybody in full for that.” Hebblethwaite also said he would make the same decision again if he had to.

Explaining the company’s actions to MPs, Hebblethwaite said:

“I completely throw our hands up, my hands up, that we did choose not to consult. We did not believe there was any other way to do this to compensate people in full. We assessed that given the fundamental nature of change, no union could accept it and therefore we chose not to consult because a consultation process would have been a sham. We didn’t want to put anybody through that. We are compensating people in full and up-front for that decision.”

Under the law, employees must be correctly consulted – either through their elected employee or Trade Union representatives (where 20 or more roles may be made redundant) or individually (where fewer than 20 roles are affected). Selection for redundancy should be made against a set of fair and objective criteria. Alternative employment should be offered if relevant, and employees should be asked to volunteer for redundancy wherever possible.

Ben Wilmott, head of public policy at the CIPD, said the situation showed a “shocking disregard” for the employment rights of the firm’s workforce. He said:

“Such action has a damaging impact on employees and their families’ wellbeing, and badly undermines trust between business and the public. It’s by not only observing the law but by going beyond it, and treating people with respect and humanity that organisations will engender loyalty, engagement and performance.”

Rachel Suff, employee relations adviser at the CIPD, commented:

“Business leaders must recognise that sacking staff on the spot via video, and with no notice, is inhumane and very difficult to justify, whatever the circumstance. While it is a harsh reality that organisations sometimes must make job cuts, there is never any excuse for employers not to fully consider the wellbeing and financial costs to workers, and how to minimise these. Businesses that fail to meet their legal and moral obligations to consult and treat people fairly face significant risks and costs and, just as importantly, will suffer long-lasting damage to staff morale and employment relations, as well as to their reputation and brand. Employers should always act with integrity and compassion and respect the dignity of their staff throughout the process if they have to take decisions that impact people’s employment.”

Asked how much money P&O Ferries will save by sacking 800 staff and employing agency workers, Hebblethwaite said:

“This entirely different model is about half the price of the previous model. The average rate is from about £5.50 to about £6, depending on exchange rate. The rates we are paying are in line or above ITF (International Transport Workers’ Federation) minimum standards and it is the operating model that the vast majority of operators across the globe work to. So this is the competitive standard.”

Wilmott has called for the government to take urgent steps not just to address legal loopholes, but to bolster enforcement, saying:

“There is a need to significantly improve the enforcement of employment rights in the UK and ensure the new single enforcement body has the necessary resources to take proactive and effective enforcement action when it is established.”